Insert a playlist into another playlist - why is this not possible? it would just require to look up the tracks contained in the source playlist and copy them into the target playlist. The programming effort is close to zero. To create a warning popup that says "you can only add tracks, smart blocks, and web streams to playlists" required about the same amount of work.

I'm just a beginner with Airtime, and I think many features are cool and well implemented, but it seems there are simple features missing that would make my use of Airtime much simpler. (I'm a database programmer, I know that such features would just require a few lines of SQL and programming code.)

Well this was done I'm sure to prevent infinite regression. There are a lot of issues like this that are kind of annoying. If you are interesting in contributing the best way to do so is probably to help out with the LibreTime fork since the development by SourceFabric is concentrated on their SaaS version airtime.pro with no contributions to their open-source version within the last few years. Libretime is at http://github.com/libretime/libretime